[print-me]
Citibank Deceives Borrowers

Citibank Deceives Borrowers

Citibank Deceived Borrowers About Tax Benefits, Incorrectly Charged Late Fees and Interest, Sent Misleading Monthly Bills and Incomplete Notices

11/22/17 – The Consumer Financial Protection Bureau (CFPB) took action against Citibank, N.A. for student loan servicing failures that harmed borrowers.

. Specifically, the Bureau found that Citibank:

  • Citibank misled borrowers into believing that they were not eligible for a valuable tax deduction on interest paid on certain student loans.
  • The company also incorrectly charged late fees and added interest to the student loan balances of borrowers who were still in school and eligible to defer their loan payments.
  • Citibank also misled consumers about how much they had to pay in their monthly bills.  
  • Citibank failed to disclose required information after denying borrowers’ requests to release loan cosigners.

The Bureau is ordering Citibank to end these illegal servicing practices, and to pay $3.75 million in redress to consumers and a $2.75 million civil money penalty.

“Citibank’s servicing failures made it more costly and confusing for borrowers trying to pay back their student loans,” said CFPB Director Richard Cordray. “We are ordering Citibank to fix its servicing problems and provide redress to borrowers who were harmed.”

Enforcement Action

The CFPB’s order requires Citibank to:

  • Refund $3.75 million to harmed consumers
  • Make changes to their servicing practices
  • Pay a $2.75 million fine


With the announcement that Richard Cordray is stepping down from the Consumer Financial Protection Bureau “CFPB” the Trump administration will amp its attempt to water down the power of the organization.  CFPB is the only organization that actively protects the consumers and hold run away businesses (Wells Fargo, Citibank to name one of many).  If Trump has his way any changes in the CFPB  will lead to either reversing prior orders or reduce, if not eliminate, future attempts to control and/or punish illegal and immoral acts by businesses.

About the Author:

Diane L. DrainDiane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. As a teacher and retired law professor, Diane believes in offering everyone, not just her clients, advice about the Arizona bankruptcy and foreclosure laws. She is also a mentor to hundreds of Arizona attorneys.

I would be flattered if you connected with me on GOOGLE+

*Important Note from Diane: Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article.  Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*